The latest analyst coverage could presage a bad day for Zangge Mining Company Limited (SZSE:000408), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
After the downgrade, the consensus from Zangge Mining's four analysts is for revenues of CN¥3.4b in 2024, which would reflect a painful 35% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to tumble 28% to CN¥1.56 in the same period. Prior to this update, the analysts had been forecasting revenues of CN¥6.1b and earnings per share (EPS) of CN¥2.68 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 35% by the end of 2024. This indicates a significant reduction from annual growth of 31% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Zangge Mining is expected to lag the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Zangge Mining. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Zangge Mining's revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Zangge Mining, and a few readers might choose to steer clear of the stock.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Zangge Mining analysts - going out to 2026, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
